The Japanese are famous for their savings and investments. But middle-income families can only save because they don’t pay enough tax for officials in Tokyo to provide basic services. Every year the Japanese government runs a 10% budget deficit, such that its accumulated debt is worth almost 250% of GDP.
The Japanese government considers that Japan suffers from a deficiency of aggregate demand. As do all sorts of other people like Paul Krugman, the IMF, OECD and so on. The solution to which is a Keynesian boosting of said demand. By government spending more than it taxes and borrowing the difference.
In what is supposedly an economics column a certain Mr. Inman tells Observer readers that in reality the Japanese government shouldn’t be doing that at all. It should, instead, be running a balanced budget and should thus raise taxes.
Just like he hasn’t been saying about the British economy this past decade.
Do these people just never bother to connect the dots?
The rest of the column is worse of course. It’s the starting gun in the argument that we’re all saving too much therefore the government should tax our wealth off us. The Spud will love it meaning all rational people will hate it.